Swiss banks' pay bitterly for dark past

05 March 2007 by Pierre Hazan

On August 12, 1998, the Union of Swiss Banks and Crédit Suisse agreed to pay 1.25 billion USD to American Jewish organizations bringing to a close one of the most serious political crises that Switzerland has known since WWII. Nine years later, what assessment can be made of a controversy that aroused passions, provoked a political identity crisis in the heart of Swiss society, strained US-Swiss relations and forced Swiss banks to lift bank confidentiality for the years of 1939-1945?

The root of the issue is simple: a number of Jews murdered by the Nazis had bank accounts in Switzerland. After 1945, the Swiss banks made no effort - and sometimes even blocked efforts - to return this money to the rightful account holders. But with the end of the Cold War, Switzerland lost its strategic importance for the US. American Jewish organizations increased their pressure on Swiss banks, threatening to boycott them, while victims filed a class action lawsuit. Threatened with doors being closed to the vital American market, the Swiss banks signed the general accord before the American judge Edward Korman. The sum was negotiated bitterly and secretly. To this day there are two opposing theories. For the Swiss banks, this sum is largely overvalued, having nothing to do with the reality of the funds in escheat. They say, basically, they are paying for having lost the battle with the Jewish organizations. The latter, on the contrary, assert that these banks destroyed the records of more than 2.5 million accounts opened between 1939 and 1945 (out of a total of 6.8 million) and thus concealed the disappearance of the assets.

Want to read more?

If you subscribe to a free membership, you can read this article and explore our full archive, dating back to 1997.

Subscribe now

Related articles

19 February 2007 by Laetitia Grotti

One year ago on January 6, 2006, the 17 members of Morocco's Equity and Reconciliation Commission (IER) were closing up shop after submitting their final report to King Mohammed VI. The Moroccan truth commission had received a flood of compliments from the international community praising the recommendations in its report, especially those advocating legislative and constitutional reforms. One year later, however, the results have been rather mixed.

11 September 2006 by our correspondent in Arusha

After having tried high-ranking officers, ministers, businessmen, priests, journalists, local officials and militiamen, the International Criminal Tribunal for Rwanda (ICTR) is in uncharted waters. On September 11, the most famous rwandese troubadour of his generation will stand trial for genocide. 

23 October 2006 by Christine Chaumeau

China is keeping a polite distance from international criminal justice. Beijing is hardly disinterested, but China does want to make sure that these new global mechanisms are not going to infringe upon its sovereignty by delving into particularly sensitive cases such as Tibet. 

United Nations Operation in Burundi disarms rebel forces in Mbanda in February 2005 (Photo: Flickr/UN Photo/Martine Perret)
03 June 2015 by Janet H. Anderson, The Hague (The Netherlands)

Over the last month, Burundi has hit the headlines as the president put himself forward to be elected for a controversial third term, resulting in street protests, thousands of refugees who fled instability and an attempted coup. Behind the issues of elections and constitutionalism are also those of justice following Burundi’s long-running civil war. The international community supported an intensive process of negotiation and the signing of the Arusha Accord in 2000. But in the decade and a half since, its provisions on justice have been debated though never fully implemented.

06 November 2006 by Pierre Hazan

France's attitude towards international criminal justice is marked by ambiguity. Paris subscribes to a vision of the world in which international humanitarian law is considered a way to curb violence against civilian populations, but at the same time it is wary of an unchecked judicial system that could end up prosecuting French soldiers engaged in areas where it has old and deep-rooted interests.